Vår Energi to acquire ExxonMobil’s Norwegian upstream assets

Norwegian oil and gas company Vår Energi has signed a $4.5 billion deal to acquire the non-operated upstream assets of ExxonMobil in the North Sea and the Norwegian Sea.

The acquisition will give Vår Energi access to 20 plus producing fields offshore Norway, which including Grane, Snorre, Fram, Ormen Lange, and Statfjord among others. Put together the fields involved in the transaction have a 2019 production of around 150,000 oil-equivalent barrels per day.

Vår Energi, which is owned by Eni and HitecVision expects to take the no.2 position on the Norwegian Continental Shelf (NCS) through the deal after rival Norwegian oil and gas giant Equinor.

The deal will take Vår Energi’s reserves and resources to around 1,900 million boe. The Norwegian oil and gas company expects to have a production of close to 300,000 boepd this year after taking the acquired assets into consideration.

Vår Energi has plans to invest nearly $7 billion in the Johan Castberg, Balder X and Grand fields in the 2020-23 period to further ramp up its production in excess of 350,000 boepd by 2023.

Kristin Kragseth – Chief Executive of Vår Energi said: “This transaction is a major milestone in the short history of Vår Energi and a proof of our commitment to further develop the NCS. In delivering on our ambitious growth plans, Vår Energi will not only be a major force on the shelf, we are also creating major opportunities for Norwegian suppliers in the years to come, securing employment in many parts of the country.”

The deal does not include an ExxonMobil refinery in Slagen and also a downstream network comprising close to 250 independently owned Esso-branded retail sites across Norway.

ExxonMobil is undertaking the sale as part of its plan to divest around $15bn worth non-strategic assets within the next two years. In 2017, ExxonMobil sold its operated stakes in the Balder, Ringhorne East, and Jotun Ringhorne fields to Point Resources, which subsequently merged with Eni Norge to form Vår Energi.

Neil Chapman – senior vice president of ExxonMobil said: “Our objective is to have the strongest, most competitive upstream portfolio in the industry. “We’re achieving that by adding the best set of projects we’ve had in many years and divesting assets that have lower long-term strategic value. This sale is an important part of our divestment program, which is on track to meet our $15 billion target by 2021.”

The transaction, which will be subject to regulatory approvals and other normal preceding conditions, is anticipated to be wrapped up in Q4 2019.